George Nicoletti Intends to Capitalize on Mabry v. Aurora Loan Services

Dear Readers: 

My good friend and brother in Christ George Nicoletti a well-respected Real Estate Attorney, Litigator and Counselor at Law had some interesting commentary regarding the Mabry v. Aurora Loan Services case which he included in a demurrer in a case which involved a failure by a lender to contact client regarding loan modification prior to proceeding with a notice of default.  Mr. Nicoletti has been quite successful in his pursuit of ruthless lenders and their foreclosure practices.  Please read below for his comments.  Additionally, if you need help, feel free to call him at 805 719-2750.

"AN EXAMINATION OF MABRY VINDICATES POINTS MADE IN PLAINTIFFS ORIGINAL COMPLAINT SUCH THAT ALLEGATIONS NEED NOT BE CHANGED.

There is a temptation to read Mabry v Superior Court (Aurora) loosely (that it permits contact  subsequent to the NOD which would somehow cure the requirements of the contact to take place within the statutory 30 days or more before the NOD is recorded).  Mabry defers to a finding of fact by the trial court that the exploration called out in CC 2923.5 was intended to be simple and explanatory in nature.  That would not change the timing of the “assessment and exploration”, however.  The decision didn’t indicate that the duty giving rise to Plaintiff’s private right of action could be accomplished later in time than the statute designates.  It would be a gross misreading of the case to minimize the timing when the duty to convey these alternatives was to take place.   For the Defendant to simply state that it explained alternatives to foreclosure in casual conversation sometime after the NOD does not embrace the guidance in Mabry nor California’s legislative intent. 

The Court in Mabry construed that the statute was carefully drafted to avoid federal preemption of servicing functions such as new loan application process mandated. The notion that the lender has only a cursory duty to explain the alternatives could lead one to opine that the Court simply views 2923.5 as a 30 day delay, where once a bank adapts a suitable form letter procedure, it satisfies the legislative intent.  Not so. The emergency nature of the statute suggests “personal” contact, not anonymity. This “personal” quality of the contact is affirmed by the language of .5 following the contact requirement itself where it mandates that “during the initial contact, the mortgagee..shall advise the borrower that he or she has the right to request a subsequent meeting, and if requested the mortgagee..shall schedule the meeting to occur in 14 days. 

The “shalls” should not go unnoticed by this Court although the Federal trial Courts seemed to have had no trouble ignoring them (except for Ortiz-also attached herein with highlight).  Neither should the spirit of the statute to encourage personal rather than anonymous contact, be ignored.  The intimacy of the contact is tempered by the last sentence in the section that “any meeting may occur telephonically” but still the statute encourages someone from the bank to take ownership of the account and be personally involved, and not generate anonymous form letters and cosmetic messages.    

The Cardenas amendment to the Perata Mortgage Relief Act also inserted the word “initial” in front of the word contact for a reason.  This obviously suggests that the duty to assess and explore alternatives does not meander through the various conversations taking place after the “initial contact”, unless of course it is at the mandated meeting within 14 days.  Should this Court credit post NOD facts declared herein finding that various conversations at various times after the NOD was recorded or during subsequent  meetings, letters or other communication between the borrower and various bank agents constitute a fulfillment of these duties mandated at that “initial contact”, it would defy the Mabry definition of this Plaintiff’s right of action.  To rule that the duty of contact in .5 is somehow satisfied if an agent mentioned an alternative to foreclosure during one of those later communications, it would be flying in the face of  the specificity of the statute (“initial contact”), California’s legislative intent and the Mabry decision itself. 

The proper determination of “who is telling the truth” is to engage in a trial or take evidence or through Summary Judgment, and certainly not find that factual determination based on Demurrer exhibits, whatever their impressive length and pomp.  This would deprive this Plaintiff of his right to due process through cross examination, hearsay objection and other evidentiary controls, to establish what the Mabry Court gave back to the trial court with the following language  “This case will obviously have to be remanded for an evidentiary hearing”.

               It is important for this Court’s application of the Mabry decision to note that the writ was granted and the guidance to the trial Court was that if it found that .5 was not complied with, the “sale shall be postponed until Aurora files a new Notice of Default in the wake of substantive compliance with .5”